Publicis and Omnicom merger creates scramble for clients

A plan to merge Publicis and Omnicom into the world’s biggest advertising group has begun a scramble by rivals to poach their blue-chip clients worried the new agency might face conflicts of interest.

Without any defections, the Franco-US giant would bring the accounts of major competitors in a number of industries such as Apple and Samsung, or Coca Cola and PepsiCo, under one roof.

Publicis boss Maurice Levy and Omnicom’s John Wren spoke to some of their biggest clients before the €26.5bn deal was announced on Sunday, and made further calls yesterday to reassure them they will be better served by the new group.

But rival chief executives were already scouting for accounts to poach from the soon to be formed group, industries sources said.

Under the planned deal, the French and US groups will form a giant that will have the necessary scale and investment firepower to cope with rapid changes brought by technology on the advertising business.

Rival ad groups have a rare opportunity to swoop as contracts between major advertisers and agencies often include clauses that say they can be renegotiated in the case of agencies being bought or sold.

“It’s good for us and other independents,” said David Kershaw, CEO of M&C Saatchi. “It shakes out more people that want great creative and global capability but they don’t want to be involved with one of these behemoths, and also who feel uncomfortable having their competitors within the same group,” he said.

The merger will bring together brands such as Saatchi & Saatchi and BBDO Worldwide and DBB Worldwide.

Mr Levy and Mr Wren said they did not expect any major problems with big advertisers defecting to rivals, with Mr Levy describing clients’ reaction as “extremely positive”.

“We’re going to work extremely hard to resolve any client conflict issues with creative solutions,” said Mr Wren, adding that he expected only roughly 1% in revenue losses due to potential contract losses.

Shares in rival ad groups leapt yesterday, in a sign of their perceived opportunity and the prospects for further consolidation in the industry.

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